If you've got kids, and they are getting to the age where it's time to tell them the truth about Santa, The Easter Bunny and the Tooth Fairy, but you aren't quite sure how - check out this essay by Corwin:

Childhood Magic
In every child's life the joy of Santa Claus, The Easter Bunny and the Toothfairy are high points during their youth. Everyone knows the story behind each. First there is Santa who visits the homes of all the nice children every year. Then there is the Easter bunny leaving candy for all the kids to fight over. And lastly there is the Toothfairy, giving children a dollar for each tooth they leave under their pillow. All children love these characters until they learn the "truth" about them. Until they learn that they are not real. However that is far from the case...
Contrary to popular belief they are quite real indeed. However they are not what they seem to be. The whole "selfless giving act" on the parts of Santa, the Easter bunny and the Toothfairy are really one big cover for a huge racketeering business. First off let me say that the Toothfairy is not one fairy, but a whole coalition of fairies from across the globe called The Toothfairy Union. The Toothfairy Union believe it or not is run by Santa Claus. Sounds great right? Unfortunately for us it's not. Santa is not the best person to run a business. Santa has been known for his constant drinking, drug abuse and gambling problems. Sadly for us that costs money. Santa has had to resort to accepting bribes from parents who want to see their naughty child put on the nice list to pay for his indulgences. Then when that was not enough Santa had to start stealing company funds. This started to lead to the decline of the Toothfairy union. What was once a great, successful and honorable establishment had turned into an organized crime syndicate in no time. With the Toothfairy union cheating one out of every three kids of their money most kids have stopped believing that the Toothfairy exists. Fortunately the only good one of the magical bunch, the Easter bunny has started to give cheated children a extra dollar on Easter. However from here things only got worse. Santa's frequent FWI (flying while intoxicated) incidents have lead to a catastrophic crash involving two dead reindeer, one crippled elf, 8,614,197$ of damage and one dead grandma. After this the Easter bunny has started taking over Santa's midnight runs. Life went on like this for approximately six years, until the Toothfairy union got involved. With Santa only leaving his home to get more alcohol or drugs the Toothfairy union started looking to a new leader, Toothfairy-1313. After many years Toothfairy-1313 has gained enough support to singlehandedly run the Toothfairy union. From here he called in the Easter bunny one day and had a chat with him. Toothfairy-1313 strongly recommend to the Easter bunny that he should mix in "sustenance 84" into his candy. For all of those who don't know what "sustenance 84" is I will tell you. "Sustenance 84" is a illegal product once used by the Toothfairy of old to cause tooth rot. After consuming just a small bit of it any tooth which came in contact with it will painfully fall out in a matter of days. This causes a major spike in business for the Toothfairy union, who use teeth to make a refined powder with similar properties to cocaine. After hearing this the Easter bunny walked out on Toothfairy-1313. That was the last time he was ever seen. Now we enter the dark ages of magical lore. Toothfairies blackmail parents into slipping "sustenance 84" into meals, the role of "Santa" has been taken over by a group of fairies who steal twice the sum of money left as presents from the owners house in the form of jewelry. The Easter bunny has been replaced by the Easter rat, who belongs entirely to the Toothfairy union because of his addiction to tooth powder. Then the letters started. Angry letters from children across the world. Letters to the Toothfairy, letters to Santa, letters to the Easter rat. Well most of these letters got burned on sight, some Toothfairies with a sick sense of humor wrote crude letters back. However someone had the sense to write to Mrs. Clause.
The whole time this happened Mrs. Clause was on vacation at the Bahamas. However the moment she read the first letter she went straight back to the north pole and beat some sense into Santa. With the persuasion of Mrs. Clause Santa went into rehab. Two long years later Santa checked out. and on that day there was chaos inside the main building of the Toothfairy union. After a brutal brawl Santa restored order, With Toothfairy-1313 removed from office along with several other supporters Santa returned to office. Next after the funeral for the Easter bunny Santa started a search for a new Easter bunny, there weren't many volunteers . However Santa has had his eye on a surprisingly popular fairy, popular in the wrong crowd that is. Toothfairy-666...